Which of the Following Events Occurring After the Audit Report

question 130

Multiple Choice

Which of the following events occurring after the audit report release date most likely would cause auditors to make further inquiries about the previously issued financial statements?

• A) An uninsured natural disaster occurs that may affect the entity's ability to continue as a going concern.
• B) A contingency that had been disclosed in the audited financial statements is resolved.
• C) New information concerning undisclosed lease transactions during the period under audit is discovered.
• D) A subsidiary that accounts for 25% of the entity's consolidated net income is sold.

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Definitions:

Heavy Loads

Refers to materials or goods that are of great weight, often requiring special equipment for transportation or handling.

Yield Strength

The stress level at which a material begins to deform permanently, marking the transition from elastic to plastic behavior.

HSLA Steel

High-Strength Low-Alloy Steel, a type of carbon steel that combines strength, weldability, and corrosion resistance at a lower weight.